More than 13 million people of State Pension age can defer claiming to boost payments or stop paying National Insurance contributions if still working

More than 13 million people across Great Britain have reached State Pension age and are receiving weekly payments of up to £241.30. Those who have reached the official retirement age, which is currently undergoing a phased increase from 66 to 67 between now and 2028, have the option to stop working and claim their State Pension, defer their claim, or continue working while claiming it.

If you are considering claiming your pension while remaining in employment, it is worth bearing in mind that the Personal Allowance is frozen at £12,570 until April 2031, and any earnings above this threshold will be subject to taxation. While deferring your claim can increase annual State Pension payments by nearly £700, many older workers may be unaware that upon reaching State Pension age, they are no longer required to pay National Insurance Contributions (NICs) through their wages.

However, this financial benefit does not take effect automatically and must be brought to your employer’s attention, though assistance is also available through HM Revenue and Customs (HMRC). If you are an employee who has already reached State Pension age and is still paying NICs, you are entitled to reclaim that money. Guidance published on GOV.UK outlines the full process for removing NICs from your pay, whether you are employed or self-employed, reports the Daily Record.

It states: “If you’re self-employed, your Class 2 National Insurance contributions will no longer be treated as paid. You stop paying Class 4 National Insurance from 6 April (start of the tax year) after you reach State Pension age. You only pay Income Tax if your taxable income – including your private pension and State Pension – is more than your tax-free allowances (the amount of income you’re allowed before you pay tax).”

According to official guidance, if you carry on working past retirement age, you must provide your employer with proof of your age to ensure you cease paying National Insurance. This can be done using a birth certificate or passport. Should you prefer not to show your employer either document, HMRC is able to issue a letter to present to them instead.

The letter will confirm that you have reached State Pension age and that you do not need to pay National Insurance. It is worth noting that you will need to write to HMRC explaining your reasons for not wishing your employer to see your birth certificate or passport.

If HMRC does not hold a record of your date of birth, they will request that you submit your birth certificate or passport for verification. Certified copies are acceptable.